Topic: The mybitcoin.com taught us a lesson - page 2. (Read 4470 times)

Warning re: bitprotection

only encrypted wallet.dat should ever be sent to a 3rd party. otherwise its the equivalent of putting money inside and envelope and posting it to a stranger, and hoping no one opens it.

Your "about us" link on the left side of your website appears to be broken.

The way you are going it sure sounds like you are serious. My point was that the service you talk about is and should be the responsibility of each bitcoin user to backup their own wallet file.

Agreed. And backup your own damn wallets yourself!

Then by all means start the service and see how much business you get following the series of bad-press events occurring around bitcoin.

See how many people trust you.

No problem-I don't like bullies.

Thanks Mt. Fun I'll remember that he is as much the same boat as me when it comes to a service.  I'll take your advice and build up some reputation and provide good customer service! sound advice. Thanks!

Dude, don't listen to that guy. The "UABB" is just something he made up to feel important. Anyone who trusts the "UABB" is a fool. Do your own service and build up your own reputation by your own good customer service.

Will of course the owner of Mybitcoin took off with the coins! It would take one time of that and our service is dead on arrival what is the point? So I guess no service is to be trusted I suppose it makes sense.  We don't back it up to a server ?  I hear you what your saying! Thanks for the feedback

Well people can encrypt the wallet.dat file like they normally would and then send it. There is no reason for us to be "poking" around in it. The minute it arrives it is pull downed offline and stored away.

interesting!

Yea, you might need to get a new interior decorator. Maybe get someone with less NERVE

Matthew... what is that pink drapery in your background?

Insurance fees will depend on the number of companies you are insuring, and the risk that those companies pose. Basically, if you have 10 companies, each insuring for $10,000 ($100,000 total), and there is a 10% chance that every year one of them will fail and file a claim (for $10,000), you need to make sure each company pays at least $10,000/10=$1,000 a year.
Your major hurdles will be
1) Getting enough people paying enough into a pool large enough to get it at least started, since insuring even just two companies means that you may need both of them to pay half of what they may be worth. If their risk is small, that may make things easier a bit.
2) Calculating the risk of each company will require some professional accounting help. They're called actuaries, there are typically 3 to 6 of those graduating from about 100 general accountants a year, so they're rare, and they are VERY expensive.
3) You will need someone doing on-site inspection of every business you are insuring to come up with initial rates, to make sure they are staying compliant, and to inspect them once they file a claim.
In short, it's not a cheap service to get off the ground. Though if you think there is a need for it, it may be something people are willing to invest in to get the initial insurance pool (of money) going.

As for how to insure Bitcoin, just issue policies in other currencies (USD/EUR), and when the business loses Bitcoin, they'll use their insurance to buy more. They would only be covered for a set amount of USD, so it will be up to the business to make sure they increase their coverage if they get more customers or the value of BTC goes up. Insurance companies aren't liable if the business can't cover all their losses because their coverage was small (ditto for you people with too little coverage on your houses or cars; if your house burns down or you hit a Ferrari, and your policy doesn't cover your losses, you're SOL).
I suspect there are already other insurance companies that insure sensitive valuable data. They may have trouble understanding what Bitcoin is for their "insurance audit" purposes (from #3 above), but they will likely come around.

Matthew, that is basically the service we offer. We tuck away a copy of your wallet.dat and can even insurance against it. Of course trust is the biggest issue for any service like this so we'll see how it turns out!

You say "taught" like the community absorbed the lesson it learned from this and won't make the same mistake next week with another sketchy service.

lol

Once again there is the trust issue involved. A user has to trust the service provider. Bitcoin was designed so you don't need to trust anyone but yourself by keeping your own bitcoins safe and in YOUR possession.

What happens if your service you have described crashes in the worst possible case? Who will insure you?

The idea still does not seem practical from any angle that I can see.

I'm not sure insurance is a feasible idea for bitcoin just like loans in bitcoin are likely not to work given the nature of bitcoin.

Ultimately insurance is somewhat a ponzi scheme (a legal one at best) in which customers (investors) pay their premiums to be "insured" while you pay older investors that collect on their insurance policy.

How do you insure something that is of limited supply and that could have a vast price movement in short periods of time?

If bitcoin continues in a Bull market you will ultimately lose as an insurance company for bitcoin.

Why not just get plain business liability insurance, and up your coverage as you increase deposits? It will cost you, and you will likely have to submit to security and business audits by the insurance company, but otherwise should be sufficient. If you lose people's money, just use insurance to buy more.
Though, you mentioned your bank will be free? So getting money for business insurance premiums (not cheap) will be tough...